CALGARY – St. Patrick’s Day turned into “bloody Tuesday” in Calgary as major companies Talisman Energy Inc. and Nexen Energy ULC — both recently acquired by foreign operators — axed hundreds of employees, adding to the surge of energy sector jobs cut as a result of low oil prices.

Talisman, the international oil and gas producer that has been purchased by Spain’s Repsol SA, said 10% to 15% of its employees and contractors would be laid off this week, or about 150 to 200 of 1,300 Calgary head-office jobs that support its global operations.

“It’s a tough week, it’s a tough time for the industry, and the reality is that no oil and gas company is immune to low commodity prices,” said Brent Anderson, spokesman for Talisman.

Nexen, a subsidiary of China’s CNOOC Ltd., also announced 400 job cuts – 300 of them in Calgary. The job losses represent 14.5% of the company’s total Canadian head count.

“A decision was made to conduct a thorough review of our organization to ensure our long-term viability and sustainability,” CEO Fang Zhi said in a statement. “While regrettable, these organizational changes are necessary to align the company with our reduced capital spending program. We take these decisions seriously, and all impacted employees have been treated fairly and with respect.”

Oil prices have fallen more than 50% since June and have recently resumed their slide. The West Texas Intermediate oil price fell again Tuesday, sliding US42¢ to close at US$43.46 per barrel.

Data released Friday by Statistics Canada showed that collapsed oil prices are taking a bite out of Alberta’s job numbers, as the province’s unemployment rate jumped to 5.3% in February, up 0.8 of a point from the month before. StatsCanada said there were 14,000 net job losses in province during the month, many of those in the resources sector.

The layoffs at Nexen were carried out throughout the day as employees were advised about their status in their own offices. They were told not to make public statements, nor to pack their belongings, which would be delivered to their homes by the company, a source said.

It’s a “bloody Tuesday,” said one observer. “What a way to ruin St. Patrick’s Day.”

More layoffs are expected this week, picked by employers because it’s ahead of spring break when many take holidays and before the end of the first quarter.

“I can tell you with absolute certainty you’re going to hear more fairly sizable layoffs happening in the next couple of days that we’re already aware of with some of our clients,” said Shannon Bowen-Smed, CEO of Bowen Workforce Solutions, a Calgary-based recruitment and placement firm.

Ms. Bowen-Smed said that Tuesdays and Wednesdays are optimal times to lay off staff because employees frequently take unapproved days off on Mondays.

Similarly, she said that larger companies hire “outplacement agencies” that are required to follow up with laid-off employees in the days following their dismissal for emotional support. That’s part of the reason layoffs aren’t often announced on Thursday or Fridays, she said.

The job cuts at Talisman and Nexen follow layoffs at other major energy sector players.

Suncor Energy Inc. announced in January that it would layoff 1,000 staff. Company spokesperson Sneh Seetal said Tuesday that “a large portion of those workforce reductions … were completed last month.”

Cenovus Energy Inc. spokesperson Brett Harris said his company had already carried out its previously announced job cuts. “When we announced our 15% workforce reduction, that’s when the process started and it’s [almost] complete by now,” Mr. Harris said.

Shareholders approved Talisman’s US$8.3-billion takeover by Spain’s Repsol SA last month. The deal is expected to be finalized in the second quarter, likely resulting in more job losses since functions associated with being a public company will no longer be needed.

It’s a ‘bloody Tuesday,’ said one observer. ‘What a way to ruin St. Patrick’s Day’

This week’s layoffs at Talisman are the result of lower investment, which means lower activity levels and less need for staff, Mr. Anderson said.

CNOOC purchased Nexen two years ago for $15.1 billion and promised to keep all its staff. But layoffs started almost immediately after the deal was approved by the federal government as a result of more direct control from Beijing and difficulties at some operations, including the Long Lake oil sands project.

The Wall Street Journal reported last month that CNOOC “could be facing writedowns of more than $5 billion related to its 2013 acquisition of Canada’s Nexen Inc., according to J.P. Morgan.”

In Tuesday’s statement, Nexen said it “is fully compliant with all of its Investment Canada undertakings,” and that “Nexen has enhanced its performance over the past two years. We have already demonstrated our ability to continuously improve as evidenced by our best-ever health, safety and environmental performance in 2014, our Oil Sands production rising by 40% since 2012 and our ability to bring on Golden Eagle, a major North Sea development, on-stream ahead of schedule and under budget.”

If Friday's gains are anything to go by, investors are champing at the bit

Comments

Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our community guidelines for more information and details on how to adjust your email settings.